Small Stop Loss Automated System

Discussion in 'Automated Trading' started by DoubleTop, Sep 7, 2011.

  1. Hi all,
    I'm creating a system that has a 2-4 tick stop loss on any market. I'm wondering if anyone else has a system that uses small stops. Have you had any issues have stops this small? I've heard roomers that having stops this small could be in the Ask/Bid spread and if price goes against you it could not even recognize your stops. Maybe that's depending on your brokers/platform?
  2. jb514


    Reword what you are trying to say; you aren't making sense.
  3. yeah, its a wonderful idea.

    use 1 tick stop!
    or, the 2nd best idea use 1000 tick stop.

    and please remember, never use optimization or any parameters in your system

    you'll thank me later.
  4. HTmarket


    What market/products are you developing your system for?
    You might have to tweak your system when you go live.
  5. Right now I'm just gathering sim data. And have backed tested it a lot. I know personally when I trade I do get slipped a lot for usually 1 tick maybe 2. But I figured thats because of where I'm entering. I was just wondering if anyone else had a strat. that used really small stops and any information you could provide in the live setting would be extremely helpful.
  6. HTmarket


    I have such a strategy. When backtesting and optimizing some of the best S/L parameters were around 10 pips in FX. The live results were very similar to the backtesting.

    It all depends what kind of strategy you have and when its trading.
  7. LeeD


    I was running a system with narrow stops just before Lehman collapse. The exchange used to and still handles narrow stops just fine. (Make sure the broker places stops with the exchange and doesn't execute them themselves.) When the collapse happened steady moves tick-by-tick disappeared and instead 10-tick moves in 1 tick became common place. This is environment in which narrow stops are inefficient.
  8. Now that was what I was looking for!!!! Thanks LeeD. I really appreciate your feedback!